Kuwait Pursues Bigger Oil Share

October 09, 1986|By Thomas Netter, Special to The Tribune.

GENEVA — Kuwaiti oil minister Ali Khalifa al-Sabah continued to press for an increase in his desert kingdom`s oil output Wednesday, stalling efforts by other OPEC members to renew a market-stabilizing output accord.

At the same time, the Organization of Arab Petroleum Exporting Countries, a sister organization to the 13-member OPEC cartel, called for renewal of the interim output accord that limits overall production to about 17 million barrels a day and has raised prices by 50 percent since August.

Oil analysts said failure to renew the accord or fashion a new one could send prices back down toward the $9 a barrel level reached in July and lower gasoline and oil product prices. OPEC is said to want to raise prices by $4 to $5 more than the current $14 level.

Prices in the U.S. bobbed up and down Tuesday and Wednesday in anticipation of an agreement at the special Geneva meeting of the Organization of Petroleum Exporting Countries. The nervous trading reflected concern that the Kuwaiti demands, coupled with similar calls for an increased ceiling by OPEC`s most-powerful producer, Saudi Arabia, could scuttle the fragile August accord.

When asked by reporters at a break in the meeting of committees on pricing and output whether Kuwait supported a rollover of the current agreement, al-Sabah replied: ``Extend the ceiling? I am very much open.`` But when asked if he still sought a higher quota, he replied: ``Very much so.``

With Kuwait pumping about 900,000 barrels of oil a day and Saudi Arabia, 4.3 million barrels, the two countries represent nearly a third of OPEC output. Failure by either or both to agree to a rollover could weaken or scuttle any agreement, though most of the cartel`s other 11 members favor a rollover.

Al-Sabah warned of this possibility, telling the Kuwaiti newspaper al-Watan that failure to find a permanent solution to the quota distribution problem on a ``fair basis`` would send the market back to its ``previous state of confusion`` and lower prices.

OPEC hopes to avoid this by keeping its 17 million barrel a day ceiling, a 3.5 million barrel cut from its output at the end of July. The current agreement expires Oct. 31.

There was no immediate indication from ministers whether the statement by the sister organization signaled that al-Sabah and Saudi Arabian oil minister Sheik Ahmed Zaki Yamani were about to switch positions and drop their demands for higher output quotas.

Saudi Arabia and Kuwait are members of the Arab group, which said that cartel members should turn the current interim agreement into a ``long-term strategy.`` The organization`s report said that OPEC revenue for the first half of this year was 30 percent below that of the first half of 1985, despite a 22 percent increase in the volume of exports. OPEC earned about $128 billion in 1985.